Infibeam Incorporation is going to hit capital markets on Monday with an initial public offerings (IPO) of 1,25,00,000 shares of Rs 10 each in a price band Rs 360-432 per equity share. Not more than 75 per cent of the issue will be allocated to qualified institutional buyers (QIBs), including 5 per cent to the mutual funds. Further, not less than 15 per cent of the issue will be available for the non-institutional bidders and the remaining 10 per cent for the retail investors.
About the company: Infibeam Incorporation is Ahmedabad based e-commerce company offering cloud-based, modular, customisable and scalable technology platform as well as e-commerce infrastructure and logistics support for a diverse universe of merchants, products and services. The company operates Infibeam.com, one of India’s leading multi-category e-retail website.
About the issue: The issue will open for subscription on March 21, 2016 and will close on March 23. The shares will be listed on BSE as well as NSE. The face value of the share is Rs 10 and is priced 36 times its face value on the lower side and 43.20 times on the higher side.
Lead managers: The book running lead managers to the issue are SBI Capital Markets and Elara Capital (India).
Objective of the issue: The company will use the net proceed for setting up of cloud data centre and purchase of property for shifting of the registered and corporate offices, setting up of 75 logistics centres, purchase of software and general corporate purposes.
Financials: For the financial year ended March 2012, 2013, 2014, 2015 and in the six months ended September 30, 2015, revenue from operations of Infibeam stood at Rs 127.88 crore, Rs 151.15 crore, Rs 207.34 crore, Rs 288.28 crore and Rs 171.27 crore, respectively. The company’s revenue from operations increased at a CAGR of 31.12 per cent between 2011-12 and 2014-15. Infibeam losses after tax for financial years ended March 2012, 2013, 2014 and 2015 were Rs 10.83 crore, Rs 24.91 crore, Rs 25.95 crore and Rs 9.79 crore, respectively, while profit after tax in the six months ended September 30, 2015 was Rs 6.58 crore.
Strengths and Weaknesses: According to Infibeam, its integrated and operationally synergistic e-commerce business model, comprising the BaB Marketplace provide it with a competitive advantage. The integrated technology platform enables them to develop modular, customisable, and cost-effective e-commerce solutions for large enterprises as well as small and medium sized merchants. The company has also developed strong customer relationships with established brands and large enterprises to increase revenue streams. Senior management has experience of e-commerce, media and retail industries including experience at global e-commerce companies. On the other hand, the company is exposed to credit risk, exchange rate risk and interest rate risk.
Headcount: As of December 31, 2015, the company had more than 900 employees, including a large number of software engineers and information technology experts.
Logistics: As of December 31, 2015, the company had 12 logistics centers across 11 cities in India, and currently selectively outsource some of its logistics services.
In addition, Infibeam had six warehouses located at Delhi, Gurgaon, Bengaluru, Ahmedabad, Mumbai and Kolkata for its own inventory. The company has plans to significantly expand logistics infrastructure in the future to strengthen fulfilment capabilities for the BaB Marketplace as well as Infibeam.com e-retail operations, including addition of 75 logistics centres across India in the next three years.
Total Debt: As on March 2015, the company had total debt of Rs 4.95 crore. In the financial years ended March 2014 and March 2013, total debt was at Rs 8.60 crore and Rs 42.71 crore, respectively. As on September 30, 2015, debt-to-equity ratio of Infibeam was at 0.01.
Current Ratio: As on March 31, 2015, current ratio of the company was at 2.33. Current ratio is a liquidity ratio that measures a company’s ability to pay short-term and long-term obligations.